The eight expert top tips for over 50s on getting a new mortgage | Personal Finance | Finance

People over 50 may find it harder to secure a mortgage than younger borrowers. Lenders often worry that older borrowers will struggle to repay their mortgages once they retire, so they typically require larger deposits and shorter mortgage terms.

Some mortgage lenders have upper age limits, with many preferring applicants to be under 65-70 years old. However, experts have told the Daily Express that getting a mortgage at an older age is more common than you think. They have outlined advice on how to secure an affordable mortgage once you pass the age of 50.

Les Pick, Sales & Operations Director and Later Life Lending Expert at MB Associates, said: “What surprises many people is just how flexible lenders who specialise in later life lending can be these days. It’s not unusual to see mortgages running into your 70s, 80s, or even 90s.

“In some cases, the terms can be much longer than expected – a 70-year-old might still secure a 20-year mortgage, depending on their circumstances. Lenders don’t base their decisions purely on your age. What matters is affordability.”

Here are the top tips from experts:

Experts recommend that people start planning for retirement long before they retire. Taking out a mortgage at an older age requires consideration of retirement plans because borrowing once you’re retired can reduce disposable income and risk long-term financial security.

If you’re not going to continue working until age 75, when most lenders offer mortgages, it is much more likely you can secure a longer loan.

Peter Stimson, Director of Mortgages at MPowered Mortgages, said: “Most mainstream lenders will now offer repayment mortgages up to the age of 75, so unless your career isn’t going to continue until this age (for example, a Police Officer), securing a longer mortgage term is far more achievable.

“This allows borrowers to spread repayments over a longer period, rather than compressing them into a shorter term ending at 65 or 70, where you could face much higher monthly repayments or risk the mortgage being declined as unaffordable.”

Older mortgage borrowers are advised to plan ahead, as criteria can become stricter with age. By planning early, borrowers can avoid expensive rates and manage their transition to retirement income.

Lenders will assess an older borrower’s capability based on their pension income rather than salary. Without planning, a borrower may be forced into a more expensive short-term deal.

Les Pick said: “A bit of forward planning goes a long way. Start by getting really clear on your finances.

“That means understanding your income now, what it will look like in retirement, and how stable it is. Lenders will want to see that your mortgage remains affordable throughout the term of the mortgage.”

Older mortgage borrowers are advised to sort their finances before applying to ensure they can afford repayments into retirement. Many older borrowers who fail to have their money in order will fail standard affordability checks.

Your finances will also dictate which product you choose. As well as this, borrowers are urged to proactively check their credit score and gather important documents before applying.

Aaron Strutt, Product and Communications Director at Trinity Financial, said: “Just like anyone applying for a mortgage, the lenders will want to see a clear plan for how the mortgage will remain affordable. They will want to know how much you earn, your credit history and your ongoing credit commitments.

“Depending on the lender and the mortgage term taken, questions about retirement plans and pensions may come up. Having strong PAYE, self-employed or expected pension income, low debts, and a decent deposit can make a big difference.”

It might sound obvious, but it’s important to get specialist advice when applying for a mortgage. The market becomes more nuanced when it comes to older borrowers so it’s more crucial than ever to get the right advice.

Specialist advisors can compare mortgage rates to determine which one suits you best. They will help find lenders with more flexible criteria.

Les Pick said: “Speak to an experienced adviser who specialises in later life lending and has access to over 50s mortgage products.

“This is a more complex area than standard mortgages and having someone who understands the full range of options for older borrowers can make all the difference. Essentially, later life lending is a specialist area of expertise.”

Meanwhile, Peter Stimson added: “Given the range of options available and the importance of securing the most suitable product and rate, it is strongly recommended to seek independent advice from a qualified mortgage advisor.”

Older borrowers should discuss their mortgage with their family, as it could impact future inheritance. Full transparency allows loved ones to understand the rules governing debt repayment after the borrower passes away.

Les Pick said: “While it might feel like a tricky conversation, talking things through with your loved ones can help avoid complications later on.”

He added: “If a borrower passes away without life cover, lenders will usually give the family time to repay the loan typically by selling the property.”

Older borrowers might opt for interest-only mortgages to manage their lower and fixed-income in retirement. As you only pay interest, the monthly outgoings are far lower than with other mortgage types.

This also helps free up extra disposable income, reducing stress in retirement. Interest-only mortgages do not have a specific repayment date.

Peter Stimson said: “For borrowers with a lower loan-to-value ratio, properties of a certain value, and suitable financial circumstances, an interest-only mortgage may be an option. With this type of mortgage, the capital is not repaid during the term, and the full loan amount must typically be repaid by age 70 with most lenders.”

The experts recommend a Retirement Interest Only (RIO) mortgage for those approaching or already in retirement. They are often lower and require monthly payments on the interest, making them perfect for borrowers on a fixed income, including those with a pension.

Peter Stimson said: “For those approaching or already in retirement, a Retirement Interest-Only (RIO) mortgage may also be worth considering. Unlike traditional mortgages, affordability is assessed based on pension income rather than employment income.

“RIO mortgages do not have a fixed repayment date, but instead, borrowers are required to make monthly interest payments, with the loan usually repaid when the property is sold, when someone either dies or goes into long-term care.”

Les Pick added: “Then there’s the Retirement Interest Only (RIO) mortgage, which works slightly differently. You still only pay the interest each month, but there’s no fixed end date. Instead, the loan is repaid when you pass away or move into long-term care.”

Lifetime mortgages are popular for retirees looking to boost their income. They allow borrowers to access the wealth tied up in their property which can also help alleviate debt.

The lifetime mortgage is also used for borrowers who want to remain in their property. It helps reduce the stress of downsizing.

Les Pick said: “And then there’s the lifetime mortgage – a form of equity release. With this option, you don’t have to make monthly repayments unless you choose to do so.

“The loan (plus interest) is repaid when the plan ends, typically when the property is sold. Importantly, you still own your home, and you need to be at least 55 to apply.”